Australian Property

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Woeful affordability thrust back under spotlight

By Leith van Onselen The AFR has produced an alarming report today on the rapidly declining levels of housing affordability across Australia, with families in Australia’s three biggest cities struggling to find well-located accommodation for under $750,000: Prospective purchasers with $750,000 to spend on a three-bedroom house in the first four months of the year had

13

Housing construction boom on borrowed time

By Leith van Onselen Several analysts have come forward arguing that Australia’s dwelling construction boom is on borrowed time and will likely peak over the next 12 months. Key amongst these is the Housing Industry Association, which has released forecasts predicting that dwelling commencements will peak this year at 205,490 before dropping by 10.6% next

21

Banks scuttle behind APRA’s investor loan limit

From Banking Day: Commonwealth Bank subsidiary Bankwest has imposed a loan-to-valuation ratio cap of 80 per cent on investor mortgages, as it tightens its lending standards to meet regulatory pressure to limit the growth of investment property lending. Bankwest said in a statement that the change would not affect existing investment mortgage customers or customers

37

Hockey endorses dumping stamp duty for land tax

By Leith van Onselen In an encouraging development, Treasurer Joe Hockey has backed South Australia’s plan to abolish stamp duties for home buyers in exchange for a broad-based land tax that includes the family home. From The Herald-Sun: In an interview with The Advertiser, Mr Hockey said SA would have an “early adopter” advantage by

36

How the Sydney bubble will pop

From The Pascometer today, which has truly malfunctioned now: The 2015 Sydney housing boom has achieved the dubious distinction of bubble status, replete with rampant FOMO (fear of missing out) and key parts of the market departing from gravity as values rise by hundreds of thousands of dollars in a few weeks. Gravity’s power to

24

Rental market continues to weaken

By Leith van Onselen SQM Research has released its rental vacancy data for April, which registered a 0.2% increase in vacancies nationally with vacancies also up 0.1% over the year (see next chart). As shown above, every jurisdiction with the exception of Hobart recorded a rise in rental vacancies. Clearly, the commodities bust is weighing

15

HIA in panic bubble denial

By Leith van Onselen Like clockwork, the Housing Industry Association’s (HIA) Harley Dale has promptly played down concerns by ASIC chief, Greg Medcraft, that Australian housing is a bubble. From The AFR: “It is accurate to say the current ratio is banging at the top of the range that we’ve observed over the last 10-15

28

Noob schools Gotti on foreign buyers

By Leith van Onselen After Gotti’s whinging and moaning (here and here) that new charges on foreign buyers would dampen so-called investment in Australian real estate (and harm sales of apartments by the likes of Harry Triguboff), Florence Chong has offered a useful perspective on the real motivations behind Asian property investment: Higher government taxes

0

RP Data weekly housing market update

Click to view Core Logic-RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 17 May 2015. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity;

3

Auction clearances ease

The national auction clearance rate slipped over the weekend after the strongest run of results for around six years. The preliminary national clearance rate was 76.4%, down from the 78.2% recorded last weekend, according to Core Logic-RP Data: Sydney’s clearance rate fell 1.2% to 85.5, whereas Melbourne’s fell by 3.2% to 74.3%. Clearances in Brisbane,

22

Rental growth lowest in decade: RPData

From CoreLogic/RP Data comes April’s rental review and the numbers are sobering for Australia’s burgeoning army of landlords with minor capitals falling and only 1.7% growth for the year nationally: Thursday 14 May, 2015: CoreLogic RP Data’s April Rental Review out today shows that the biggest capital city rental market losers were Perth, Darwin &

102

Moody’s warns on housing bust

The credit rating agencies are clearly becoming concerned by Australia across the board. S&P is hammering the Budget and Moody’s is intensifying its critique of the bubble. From a new report: Australia is going through a period of sustained house price appreciation and increases in household debt. These trends pose a threat to Australian banks because

9

The investor mortgage fire rages on

By Leith van Onselen Yesterday’s housing finance data for March, released by the Australian Bureau of Statistics (ABS), revealed yet another surge in investor finance commitments, which has now reached truly historic proportions. According to the ABS, while owner-occupier finance commitments (excluding refinancings) rose by a seasonally adjusted 0.3% over the month, they were down

26

Investor mortgages rip higher

No real surprise here from ABS housing finance for March given the leading indicators showed it coming but still: MARCH KEY FIGURES Trend estimates Seasonally adjusted estimates Mar 2015 Feb 2015 to Mar 2015 Mar 2015 Feb 2015 to Mar 2015 Value of dwelling commitments(a)(b) $m % change $m % change Total dwellings 31 264

83

WA property crash (sort of) goes mainstream

The AFR has picked up one of MB’s consistent themes: Gavin Hegney, of Perth-based valuers Hegney Property Group, said supply of property had surpassed demand and home prices would likely drop in the coming year. Yep: Back the article: “People are using low interest rates to get ahead in their mortgage rather than upgrade,” he said. “We’ll give up 1 or

32

The end of rate hikes?

It’s getting amusing watching the market of interest rate forecasting, which is desperately grappling with historically atypical conditions, from the AFR: “The growth and inflation outlook suggests the RBA sees no threat of a rate hike until at least 2018,” Macquarie Research analysts said in a note to investors. …ANZ senior economist Justin Fabo said

60

A most welcome foreign property boom

From UBS: The value of FIRB approved applications for foreign investment in housing doubled (+102% y/y) in 13/14 to a record high $34.7bn. Within this, the majority 78% share was directed to new housing at $27.2bn (spiking 152% y/y) – of which a 79%+ share was concentrated in NSW and Victoria alone. While it’s unknown what proportion of these

27

At war with terror, except in real estate

From Michael West, one the few journalists left in Australia: …last week when a fund manager touched base and bewailed, albeit with good reason, how real estate agents were still excluded from all obligations under Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act. …The reason for this AML (Anti-Money Laundering) apartheid is the reluctance of government to ping other sectors